Episode #12 How to Stay Relevant through Industry Disruption

How to survive or even thrive though Bookkeeping industry disruption

Amy talks about the challenges and the future of bookkeeping in a changing world, where industry disruption is more and more common.

The real message of this story is: “Market and label your services with integrity and honesty (and make sure you’re prepared for change!).”

Podcast Info

Episode: #012

Series: General

Host: Amy Hooke

Guest speaker: None

Topic: How to Stay Relevant Through Industry Disruption

Read transcript

[this is not a word-for-word transcript]

Dick Smith posted a video in September 2018, and he's been talking about the companies in the hotel industry, American based companies apparently owned by two wealthy businessmen in the US have set up all of these companies. So, for example, Wotif.com, Booking.com, Trivago for example. So that's just some of the names.

Some of the well-known ones where when you Google for a hotel in a certain area, what comes up is these directories where you can go in and you can put in your location, you can put in the dates you want to stay, and the price range and it gives you, and your star rating as well. And it can return to you a search and that search will show you every hotel within your search criteria.

And so, Dick Smith posted this video, which a client shared to me, and then I had a listen to it, and so I do agree with some of what he's saying. So, I don't think it's fair on the hotels that the fees are so high.

And I also don't think it's fair that the companies are owned just by two people, and that these two people are making an absolute killing based on the hard work of hotels, and obviously they're wanting to get bookings and so these people are making a lot of money off of this.

So, I'll post the link to the video. You can watch it yourself. And the reason I want to bring this up is because he actually makes two really good points. One is about the Google search and one is about the relevancy of businesses as times change, so staying relevant.

And the third point would be about how industries are being disrupted. And I think I can see how this actually applies to the bookkeeping industry, and so what I want to do is contrast the bookkeeping industry to what's happening in the hotel industry.

Also, what's happened in the taxi cab industry. So, we can use Uber as an example as well. And we can also use Airbnb, another well-known provider in the hotel industry.

So, the first thing that I want to point out is that one of the comments that Dick Smith made was about how hotels can't compete with the Google search. He said Google is enabling them, or Google is actually allowing them to be more successful in their Google rank. And so, because they're paying so much to Google, the small hotels are unable to compete on Google.

Now what he said is both true and false. So, he didn't actually clarify. Maybe he doesn't know enough information to be able to clarify. But I need to make a distinction between Google AdWords, so they're the three ads that appear at the top of the page and then usually another three down the bottom, versus organic SEO. So, what he was referring to, he's talking about how these hotels are being found on page four and five of a Google search, because the directories are bumping them out the way.

Now, firstly I want to clarify that Google AdWords have no bearing or impact on your organic SEO Google search rank whatsoever. So, if you pay for an ad in those top three spots, your website will appear there for as long as you're paying for the ads and those ads are paid per click, which is what he's referring to when he's saying that Google is supporting them. So, Google is not supporting them. They just happen to be paying the most money to Google, so Google is giving them the top spots.

But when those people, if they ever stop paying those ad fees for those top spots, they will, those ads will disappear. So, the hotels can't compete on that.

However, he's also referring to these small country town hotels. And from what my understanding of how SEO works with a very small amount of work. Like when I say very small, I mean relative to the large amounts that they'd be paying on Google AdWords. For a very small amount of effort, they could actually rank organically on page one.

There is absolutely no reason why a hotel in a small country town cannot rank on page one if they invest some time and effort or money, if they want to pay someone else to do it, into improving their Google rank.

And I think especially country towns should be able to do this because they have the opportunity to write about lots of interesting things that are happening in the area. This may not be the case with potentially if they're in the city. Obviously, cities are very competitive, so ranking organically on Google may not actually be an option.

So, I think it's probably the city hotels that are getting hit harder by the fact that Google is allowing these people to post in the top positions.

Now I just want to add in a little point there. So, Google have actually come up with their own search engine for travel arrangements so you can look up flights, you can, which can take you directly to the provider's website. You can look up hotels, you can look up car rental, all sorts of things.

So also, the other thing that Dick Smith said was also false. So,3g Google is not actually supporting these people. In fact, I think Google's probably going to overtake them personally.

So, and the way that Google set theirs up is so that you can be directed directly to the smaller businesses' websites, and I think Google's actually doing that on purpose potentially to disrupt some of these middle men.

So, the second point that I want to make is about the websites of these hotels that he's referring to. So small businesses out in like country or suburban areas.

Now I have done a lot of searching for travel lately, and I have found that when I go to hotel websites directly or motel websites directly, often the websites are so bad. So, they, some of them are like 10 years old. They have very outdated booking systems on their website. The interface is not mobile friendly, so when you go on the website, it's very hard to navigate the website. The sites are slow, the images don't load quickly enough. So basically, these are not nice websites to use.

Whereas these big companies obviously they're developing very user-friendly websites that people can go on. And so, it makes it easy. It makes it convenient because making travel bookings is very difficult. It's time consuming, so people don't want to spend a lot of time jumping from website to website and having to make spreadsheets and summaries of all these different kinds of hotels that they're trying to track. It becomes very time consuming.

So, these directories are obviously saving people time. So that's why the people are going to the directories in favour of going directly to these smaller businesses that are advertising their hotels.

And I want to contrast this to what's happening in the bookkeeping industry. So, the thing that made me come into the bookkeeping industry to offer website designs was the fact that whenever I went on a bookkeeper's website, they were crummy. There were too many words on a page. Too much jargon. They weren't mobile friendly optimized websites and it was really hard for a layman to come and get the information that they needed.

And I thought, well there's an issue going on here and this is something that I want to personally fix, which is why I got into designing websites for bookkeepers. And then after getting into website designing for bookkeepers, my next goal was to help people to actually get their websites, not just looking good, but actually starting to get them to rank on Google.

And so that brings me to my third point. So, my third point is about disruption. So, I'm very big on, okay, so firstly you need to make your website look better. So that's step one, but the other thing that has to happen as well.

So, if you think of the website, like the label on what you're offering. It's the label on the can, or the cover of the book, or the cover of the magazine, and then what's inside needs to be representative of what's on the cover or what's on the can. So, what's on the label needs to be the same as what's in the can.

So that brings me to my third point and that's something that's actually, that I actually find quite disappointing to be honest, and that is as a small business owner myself. So, after leaving the bookkeeping industry and going into website designs and then coming in and, you know, moving into the mentoring space, what's happened for me is because I've stopped doing bookkeeping. So, but I'm still a very much a part of the bookkeeping community. And so, when I left bookkeeping, I was able to see what it was like to be a business owner looking for a bookkeeper.

Now obviously, because I know so many people in the industry, I didn't want to simply just pick a person that I knew. I wanted to actually search for a bookkeeper as though I would, you know, normally search for a bookkeeper and I found it very hard.

Again, as I was Google searching bookkeepers in my local area or bookkeepers in Melbourne, I found it very hard to find any website of a bookkeeper that I could connect with. So that was my first problem, which I mentioned in the last point.

But what then happened was, so then I had to resort to going through people that I know. So, I resorted to going back into the bookkeeping community myself and taking a chance of working with bookkeepers that I know.

And to be honest, I've worked with a number of bookkeepers from our industry that charge, you know, like quite a very high hourly rate. So, you know, round that $80 an hour mark. And the quality of bookkeeping that I received from those bookkeepers was like really poor, you know. And so, I kind of understand why it's good because I've got both sides of the coins.

But what I can see is that the bookkeepers, there are a lot of bookkeepers out there, especially the ones that charge more, they're wanting to work with bigger clients.

So, when you're a small business like me, nobody wants to keep your accounts up to date on a weekly basis. They struggle to even keep me up to date on a monthly basis. And I found that very frustrating because as a smaller business owner I'm much more dependent on those accounts being as up to date as possible, so I can make decisions, not in hindsight. But you know, I can make decisions on a regular basis based on what's coming through the accounts.

So, I could not find myself a good bookkeeper. And then, you know, then I'd hired someone that was sort of, I guess a bit of a lower rate charge wise in bookkeeping, and I found that this person left a lot of things over for me to complete, and I'm talking about $40 an hour kind of thing.

So, at $80 an hour I couldn't get someone to give me the time of day, and at $40 an hour I couldn't get someone to finish their job. And I think this is really terrible. So, I think, okay, if we're going to improve our websites, like we've got to make sure that the service is as good as what we're saying it is on the website.

Like so contrasting this back to the hotel industry. No one wants to book this beautiful hotel and then rock up at the hotel and find out that it's completely different to what they've displayed on the website because it's false advertising.

So, I think this is super relevant to every single bookkeeper. You need to make sure that if you're putting something on your website, you need to back up your service with offering, you know, that level, that standard of service and to be able to think about how small business owners feel and what they're going through and the struggles that they're having. And to understand that, you know, where bookkeeping fits into that.

Now, I don't want to side-track too much, but that can, this can go into a whole new tangent, but where does bookkeeping fit into a business? Well, bookkeeping is one department, one small department of a business, and it's very easy for us as bookkeepers to start to think like the bookkeeping is the be all and end all.

Now, it is important to have the accounts up to date, so it is a super important thing. But having transactions recorded isn't the be all and end all of a business. So, bookkeepers often, you know, the catchphrase in bookkeeping or the unique selling proposition in the bookkeeping industry is, we'll take care of the books, so you can take care of your business.

And I can tell you as a small business owner who's had to try and work with bookkeepers, I can tell you right now that when a great bookkeeper, and I have found one and I'll tell you about that in a moment. When a great bookkeeper comes along and does a fantastic job, that doesn't free me up to take care of business.

So, I need to actually poke a hole in that unique selling proposition that it's actually not quite true. It's kind of true. Like it's a relief to me to not be, not have to do the bookkeeping, but it's only, you know, it's a couple of hours a week worth of bookkeeping.

But I can tell you as a business owner, I have a lot more on my plate than bookkeeping. So, when you take my bookkeeping off my hands, it doesn't free me up. It doesn't free me up from doing the, you know, doing the business.

All it does is it gives me a little bit more time so that I can focus on, you know, sales and tweaking, fixing up my automations and all that. Generating leads and actually spending time with clients and you know, fighting with webinar software and that kind of thing.

So, I can tell you there's a lot more on my plate than just that section of bookkeeping. Yes, I value the bookkeeping and it is a great service, but we need to actually remember the place that bookkeeping has in the business and not to go overboard, like not to over promise business owners that we're somehow going to take away all of their pain and suffering because it's actually not true. And to claim that is actually untrue.

So, I took a little bit of a sidestep there, but I'm going to return back to my point number three, which is what's on the label needs to be what's in the can. It needs to accurately represent that.

So now I'm going to go on to talk to you about what I mentioned before about the hotel industry being disrupted. So, the hotel industry has been ripe for disruption. This is a catchphrase that you'll hear. Ripe for disruption, the same as the taxi cab industry. Now, well let's go to the taxi cabs first.

So, I've been catching Ubers for probably about two years now. After I went on a trip to the US, that was really, it was sort of the only option because taxis are so expensive in LA and Ubers are so cheap. So, I really fell in love with catching Ubers.

And so, when I got back to Australia, I'd use Ubers all the time because previously I couldn't afford to catch a taxi and it was fantastic to be able to jump in an Uber and to be able to go somewhere.

And then after I had my son, so you can't take baby chairs. They don't have baby capsules, so you have to bring your own, which is inconvenient. So, whereas in a taxi, you're allowed to carry the baby. So, I was able to, I had to actually go to look at a property about 20 k's away and I remember having to catch a taxi with my baby, catch a taxi there. And also, one day I had to catch a taxi home from the pharmacy.

So, there are two taxi rides. It was like, compared to Uber, it was like the worst experience. So, there was this big overweight, stinky taxi driver. I got into his grubby cab. The seats were grubby, the windows were grubby, and then it costs me twice as much as the Uber. And also, he kind of, he got a little bit lost even though it was a super easy location. Like whereas, in an Uber, you don't even have to say anything to the Uber driver. They just go to the spot, whereas this guy was like stuffing around, and he had to ask me and that kind of thing.

And the same thing happened on the way home, like bit of a creepy kind of, yeah, weird guy that made me feel really uncomfortable. And then there's no way for me to rate the driver and all that sort of thing. And also, it took quite a while for the Ubers to arrive.

So, there's clearly a difference in the level of service. And so, when taxi drivers are complaining, oh, it's not fair. I look at that and I think, well yes, it's not fair, but it's also not fair to customers that you let the standard of taxi service slide to such a low level while still charging a huge amount of money.

And so, it's not exactly what's happening in the bookkeeping industry, but we could draw some parallels there. So, I know as bookkeepers we're putting our rates higher and higher and higher and I haven't, I can't tell because I haven't taken a huge selection of bookkeepers having them work for me so I don't have that much to go off of.

Obviously, I've got all of the resumes that I've looked through, and when I look at bookkeepers' resumes, I can see a lot of substandard. And then the bookkeepers that I've actually worked with, it just has not been good enough. So, the bookkeeping industry, and I don't want to like make it sound like doomsday, but the bookkeeping industry, like the taxi industry, is ripe for disruption.

The same thing's happened with hotels. So, I can book an Airbnb and I can view ones with five star ratings, and I can look at all these different homes and these are not hotels. These are full homes where I'm able to use their kitchen and I'm able to wash and dry my clothes in their washing machine. I'm able to use an entire home. I'm able to have potentially a garage to put my car in.

So, there's all these different amazing things, you know. We stayed in Airbnb's across the USA and you know, I wasn't like over the moon about one of them, but most of the Airbnb's I've stayed in have been fantastic, amazing, like spotlessly cleaned, professionally cleaned, lovely places with like really, you know, amazing decor, great books to read on the bookshelf.

The whole experience of booking with Uber is fantastic. They've got a great mobile app. You can browse it very easily, and I did not find that with hotels. I found with a hotel I was going to pay the same, maybe even up to double the amount for nowhere to cook. Nowhere to wash my clothes, nowhere to hang my clothes, nowhere to park my car, all that kind of thing. And it just wasn't worth it.

So again, the hotel industry, it's one of those industries where they've kind of gone, we're safe, we're fine, we can get away with this. Now they're probably not thinking about it like that. They're just kind of got their head in their own bubble and they're going along as they've always done and you know, they haven't managed it well.

So of course, these middle men have come in and gone, this isn't really good enough. So, these companies have come in and it allows people requesting accommodation, they're able to rate one another. So, with Uber and with Airbnb, both companies rate one another. And that means that you both are held to account.

So, the driver and the passenger, or the person renting out their home and the guest both have to offer the best service possible, and if they don't, they're going to get their ranking affected and that's going to affect their future business.

So, what's going to happen to the bookkeeping industry? I don't know. Like I don't know how far off on the horizon it is, but I know that some of the technology that's starting to come in now, like I'm sad to say this, but some of you won't be in business when those technological changes come through if you don't keep up.

And I know, I don't know, I kind of don't like those doomsday people because you know, they try and scare people and they try and say, oh, what's going to happen? And stuff like that. So I guess I hope that you're not hearing me say this to kind of scare you or make you feel bad, but I'm saying it because I care and I think it's important and you know, I think that it's time to start paying attention to some of the things that's happening.

And I only have this insight because I've kind of stepped out into other industries and I can see what's going on. Whereas a lot of us, you know, when I was in bookkeeping and I was emerged in it, I just thought, you know, I was the bee's knees of every business and you know, I was like God's gift to small business owners, and it just wasn't true.